[Exclusive] Gwangju Sees 1,964 Properties Auctioned Off This Year Due to Unpaid Loans

Voluntary Auctions Hit 11-Year High from January to November
Economic Downturn and High Interest Rates Cast a Shadow
Repeated Failures for Old and Outskirts Buildings
▩ A Visit to the Gwangju District Court Auction Site

In Gwangju, the number of voluntary auction properties?where homes are put up for court auction after owners fail to repay loans secured by their houses?has surged due to the economic downturn and stricter lending regulations. As a result, more citizens are showing interest and visiting the auction courtrooms.

On the morning of the 24th, in front of the auction courtroom at the Gwangju District Court in Dong-gu, Gwangju, people began gathering in small groups about 30 minutes before the auction started. They repeatedly checked the auction schedule posted on the bulletin board, carefully considering their bid amounts.

On the 24th, citizens are filling out related documents at the Gwangju District Court Enforcement Officer's Office. Photo by Song Bohyun

The courtroom that day saw participation from a wide range of age groups, from young people in their 20s and 30s to those over 70. Some couples attended together, and others brought their young daughters. As the court officer began explaining the auction procedures, bidders reviewed property information on court-provided computers or filled out their bid forms with great care.

Park, a man in his 30s who stated his goal was to move to a larger home through the auction, said, "I run study groups with acquaintances and share information in group chat rooms. Although interest rates have fallen slightly, finding a home still feels overwhelming. Especially in these uncertain times, I'm trying hard to find a breakthrough."

There were also first-time visitors to the auction court. A woman in her 50s who runs her own business said, "I've been studying alone for about half a year by watching YouTube and other resources, and this is my first time attending in person. With so many properties coming up for auction recently, I hope this becomes a stepping stone for my next opportunity."

Gwangju District Court Auction Court. Photo by Song Bohyun

As more citizens head to the auction court, it has been tallied that nearly 2,000 properties in Gwangju have been put up for voluntary auction after owners failed to repay their loans.

According to the Court Registration Information Plaza, from January to November this year, there were 1,964 applications for the commencement of voluntary auction registration for real estate in Gwangju (land, buildings, and collective buildings).

Voluntary auction is a process where the creditor can immediately put a house up for auction without legal proceedings. Financial institutions begin voluntary auction procedures without a separate trial if principal and interest payments are overdue for more than three months.

Voluntary auctions in Gwangju have surged in recent years. There were 927 cases in 2021 and 764 in 2022, showing a slight decrease, but last year the number jumped by 103% to 1,551. This year, as of last month, the number of voluntary auctions has increased by 35% compared to the same period last year, marking the highest figure in 11 years since 2013.

The head of a local auction brokerage in Gwangju said, "After holding out as long as possible against high interest rates, more and more properties are ending up at auction as delinquencies pile up. At the same time, participation from younger people in auctions has increased, which is both welcome and bittersweet."

He added, "Apartments in good locations still fetch high winning bid rates, but older buildings or those in the outskirts of Gwangju often go unsold repeatedly. We'll have to wait and see how things develop going forward."